Question 1

Given a constant rate of growth of real GDP, what would cause a fall in real GDP per capita?

Accepted Answer

A) a rate of population growth that is less than the rate of growth of real GDP 
B) a rate of population growth that is greater than the rate of growth of real GDP 
C) an increase in the size of the labor force 
D) a decrease in the capital stock 
E) none of the above 
A) a rate of population growth that is less than the rate of growth of real GDP 
B) a rate of population growth that is greater than the rate of growth of real GDP 
C) an increase in the size of the labor force 
D) a decrease in the capital stock 
E) none of the above

Question 2

If Jim pays $1000 to John:

Accepted Answer

A) GDP will increase by $1000. 
B) GDP will increase, but we cannot determine by what amount. 
C) nominal GDP will increase, but we cannot be sure if real GDP will increase or decrease. 
D) we need more information in order to determine whether or how much GDP will change. 
A) GDP will increase by $1000. 
B) GDP will increase, but we cannot determine by what amount. 
C) nominal GDP will increase, but we cannot be sure if real GDP will increase or decrease. 
D) we need more information in order to determine whether or how much GDP will change.

Question 3

The largest single expenditure component of GDP is:

Accepted Answer

A) consumption. 
B) investment. 
C) government purchases. 
D) net exports. 
A) consumption. 
B) investment. 
C) government purchases. 
D) net exports.

Question 4

If real GDP increased by 2% and nominal GDP increased by 1%, then output:

Accepted Answer

A) increased and the price level increased. 
B) increased and the price level decreased. 
C) decreased and the price level increased. 
D) decreased and the price level decreased. 
A) increased and the price level increased. 
B) increased and the price level decreased. 
C) decreased and the price level increased. 
D) decreased and the price level decreased.

Question 5

Which of the following will not directly affect the size of a nation's capital stock?

Accepted Answer

A) A new factory is constructed. 
B) A new machine is installed in company's plant. 
C) An eighteen-year-old enrolls in college as a full-time student. 
D) All of the above directly affect the size of a nation's capital stock. 
A) A new factory is constructed. 
B) A new machine is installed in company's plant. 
C) An eighteen-year-old enrolls in college as a full-time student. 
D) All of the above directly affect the size of a nation's capital stock.

Question 6

A decrease in growth rates will cause:

Accepted Answer

A) an inward shift of an economy's production possibilities curve. 
B) an outward shift of an economy's production possibilities curve. 
C) a movement from a point inside an economy's production possibilities curve to a point on the curve. 
D) an economy's production possibilities curve to slope upward. 
E) none of the above. 
A) an inward shift of an economy's production possibilities curve. 
B) an outward shift of an economy's production possibilities curve. 
C) a movement from a point inside an economy's production possibilities curve to a point on the curve. 
D) an economy's production possibilities curve to slope upward. 
E) none of the above.

Question 7

Which of the following is false?

Accepted Answer

A) We do not have information on nonmarket transactions output that is reliable enough to include it in the GDP. 
B) The most important nonmarket transaction omitted from GDP are services provided directly in the home. 
C) The value that individuals place on leisure is omitted in calculating GDP. 
D) All goods and services exchanged in the current period are included in this year's GDP. 
E) All of the above are true. 
A) We do not have information on nonmarket transactions output that is reliable enough to include it in the GDP. 
B) The most important nonmarket transaction omitted from GDP are services provided directly in the home. 
C) The value that individuals place on leisure is omitted in calculating GDP. 
D) All goods and services exchanged in the current period are included in this year's GDP. 
E) All of the above are true.

Question 8

The faster the rate of technological progress:

Accepted Answer

A) the greater the rate of economic growth. 
B) the slower the rate of economic growth. 
C) the greater the rate of population growth. 
D) the slower the rate of growth of the money supply. 
A) the greater the rate of economic growth. 
B) the slower the rate of economic growth. 
C) the greater the rate of population growth. 
D) the slower the rate of growth of the money supply.

Question 9

Doctor Green grows cucumbers for home consumption.That activity is:

Accepted Answer

A) excluded from GDP to avoid double counting. 
B) excluded from GDP because an intermediate good is involved. 
C) excluded from GDP because no market transaction occurs. 
D) included in GDP because it reflects production. 
E) unproductive. 
A) excluded from GDP to avoid double counting. 
B) excluded from GDP because an intermediate good is involved. 
C) excluded from GDP because no market transaction occurs. 
D) included in GDP because it reflects production. 
E) unproductive.

Question 10

For the economy as a whole:

Accepted Answer

A) income must equal expenditures. 
B) expenditures exceed income because of taxes. 
C) income exceeds expenditures because of saving. 
D) expenditures exceed income because of the government budget deficit. 
A) income must equal expenditures. 
B) expenditures exceed income because of taxes. 
C) income exceeds expenditures because of saving. 
D) expenditures exceed income because of the government budget deficit.

Question 11

GDP is:

Accepted Answer

A) the value of all final goods and services produced domestically within a given period of time. 
B) the value of all final good and services produced anywhere in the world by a nation's firms within a given period of time. 
C) the value of all final goods and services produced by a government within a given period of time. 
D) the sum of all currency and coins in circulation. 
A) the value of all final goods and services produced domestically within a given period of time. 
B) the value of all final good and services produced anywhere in the world by a nation's firms within a given period of time. 
C) the value of all final goods and services produced by a government within a given period of time. 
D) the sum of all currency and coins in circulation.

Question 12

All of the following affect the growth in real GDP per capita except:

Accepted Answer

A) the total production of final goods in the economy. 
B) the distribution of income. 
C) the population. 
D) the production of final services in the economy. 
A) the total production of final goods in the economy. 
B) the distribution of income. 
C) the population. 
D) the production of final services in the economy.

Question 13

The measure most commonly used by economists to gauge the standard of living of a nation is:

Accepted Answer

A) labor productivity. 
B) productivity of labor. 
C) real GDP. 
D) real GDP per capita. 
E) nominal GDP. 
A) labor productivity. 
B) productivity of labor. 
C) real GDP. 
D) real GDP per capita. 
E) nominal GDP.

Question 14

Mistakenly adding the value of a good or service twice by counting the intermediate goods and services in GDP is known as:

Accepted Answer

A) value added. 
B) double counting. 
C) factor payments. 
D) net depreciation. 
A) value added. 
B) double counting. 
C) factor payments. 
D) net depreciation.

Question 15

Intermediate products:

Accepted Answer

A) produced domestically are not directly reflected in a nation's GDP. 
B) produced domestically are reflected directly in a nation's GDP. 
C) are imported retail products. 
D) are goods that are purchased by the ultimate user. 
A) produced domestically are not directly reflected in a nation's GDP. 
B) produced domestically are reflected directly in a nation's GDP. 
C) are imported retail products. 
D) are goods that are purchased by the ultimate user.

Question 16

As more capital per worker is added, a per worker production function generally becomes:

Accepted Answer

A) flatter because capital is subject to diminishing marginal returns. 
B) flatter because labor is subject to diminishing marginal returns. 
C) flatter because capital is subject to increasing marginal returns. 
D) steeper because capital is subject to diminishing marginal returns. 
E) steeper because labor is subject to increasing marginal returns. 
A) flatter because capital is subject to diminishing marginal returns. 
B) flatter because labor is subject to diminishing marginal returns. 
C) flatter because capital is subject to increasing marginal returns. 
D) steeper because capital is subject to diminishing marginal returns. 
E) steeper because labor is subject to increasing marginal returns.

Question 17

The investment component of GDP includes:

Accepted Answer

A) funds in individual retirement accounts. 
B) construction of a new steel mill. 
C) the sale of shares of Coca-Cola stock. 
D) the purchase of a refrigerator by a household. 
A) funds in individual retirement accounts. 
B) construction of a new steel mill. 
C) the sale of shares of Coca-Cola stock. 
D) the purchase of a refrigerator by a household.

Question 18

To achieve a high standard of living, a nation should:

Accepted Answer

A) increase welfare payments to the poor. 
B) use less capital and more labor in the production process. 
C) promote economic growth. 
D) increase the tax deduction for child dependents. 
A) increase welfare payments to the poor. 
B) use less capital and more labor in the production process. 
C) promote economic growth. 
D) increase the tax deduction for child dependents.

Question 19

The services rendered by a special agent with the Federal Bureau of Investigation is included in which expenditure category of GDP?

Accepted Answer

A) consumption 
B) investment 
C) government purchases 
D) net exports 
E) none of the above 
A) consumption 
B) investment 
C) government purchases 
D) net exports 
E) none of the above

Question 20

The net national product (NNP) can be obtained from the GDP by:

Accepted Answer

A) subtracting depreciation. 
B) subtracting net income of foreigners and depreciation. 
C) including the net income of foreigners. 
D) subtracting depreciation and indirect business taxes. 
A) subtracting depreciation. 
B) subtracting net income of foreigners and depreciation. 
C) including the net income of foreigners. 
D) subtracting depreciation and indirect business taxes.

Given a constant rate of growth of real GDP, what would cause a fall in real GDP per capita?

If Jim pays $1000 to John:

The largest single expenditure component of GDP is:

If real GDP increased by 2% and nominal GDP increased by 1%, then output:

Which of the following will not directly affect the size of a nation's capital stock?

A decrease in growth rates will cause:

Which of the following is false?

The faster the rate of technological progress:

Doctor Green grows cucumbers for home consumption.That activity is:

For the economy as a whole:

GDP is:

All of the following affect the growth in real GDP per capita except:

The measure most commonly used by economists to gauge the standard of living of a nation is:

Mistakenly adding the value of a good or service twice by counting the intermediate goods and services in GDP is known as:

Intermediate products:

As more capital per worker is added, a per worker production function generally becomes:

The investment component of GDP includes:

To achieve a high standard of living, a nation should:

The services rendered by a special agent with the Federal Bureau of Investigation is included in which expenditure category of GDP?

The net national product (NNP) can be obtained from the GDP by:

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

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Exam 12: Economic Growth

Given a constant rate of growth of real GDP, what would cause a fall in real GDP per capita?

If Jim pays $1000 to John:

The largest single expenditure component of GDP is:

If real GDP increased by 2% and nominal GDP increased by 1%, then output:

Which of the following will not directly affect the size of a nation's capital stock?

A decrease in growth rates will cause:

Which of the following is false?

The faster the rate of technological progress:

Doctor Green grows cucumbers for home consumption.That activity is:

For the economy as a whole:

GDP is:

All of the following affect the growth in real GDP per capita except:

The measure most commonly used by economists to gauge the standard of living of a nation is:

Mistakenly adding the value of a good or service twice by counting the intermediate goods and services in GDP is known as:

Intermediate products:

As more capital per worker is added, a per worker production function generally becomes:

The investment component of GDP includes:

To achieve a high standard of living, a nation should:

The services rendered by a special agent with the Federal Bureau of Investigation is included in which expenditure category of GDP?

The net national product (NNP) can be obtained from the GDP by:

The Role and Method of Economics

The Economic Way of Thinking

Supply and Demand

Using Supply and Demand

Market Failure and Public Choice

Production and Costs

Firms in Competitive Markets

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets, Income Distribution, and Poverty

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Economics

Filters